advice regarding collection letter

sarah_b_2

hi.
i am a totally newbie but a long time lurker
i left my job in august 2009 because i had a new job. the employer kept delaying and delaying until it fell through in october 2009.
unfortunately around this time i suffered a miscarriage which lead me to be hospitalised due to the mental impact on me and because of this, i didnt claim benefits and my focus was at the time, to get better and get home.
thankfully, i am better now and i am signing on, getting housing allowance and looking for work.
obviously, i fell behind with the bills due to no income. my rent is totally up to date and my car payment is too.
my problem is that i didnt pay a loan for 2 months and been reffered to a collection service who are demanding it all up front. my only income is £50.95 a week and i get housing allowance and council tax benefit. i am also in arrears with my council tax but i only need to pay another £40 and its cleared. i suffer from bad anxiety and this letter has really scared me. i have had interviews today so i have been focusing on them and tried to ring the debt company but it keeps ringing out but it was 5.12.
the letter is from 'cornwall collection service' and they are based in harrogate. they say i owe them £2,132.23. this was for a loan i got for £1,300 so i presume they are charging interest on top. i am getting really worked up and upset because it was written on the 6th jan and i got today, just before i was going out for interviews. i only skimmed it and i thought they would be open by the time i get home.
i get paid wednesday, so what do i do? do i offer to make payments of like £10 a week till i get employment? if i did that, it will leave me £5 a week to get food after gas and electricity.
all of your advice will be great . my parents are paying for my insurance and half of my car payment which i am very grateful for. the luxuries i have is my car, broadband (contract), phone line and sky (contract) which i cant cut back on due to them being contract. i am on the lowest packages.
i didnt know things would get this out of hand or i wouldn't of signed up to them or get the debt
reply soon, sarah.

Tixy

Hi and welcome

Sorry to hear about the tough times you have been through. Glad to hear things are sounding better now and that you have been to job interviews. Good luck with them.

As you probably know council tax should be your priority so arrange to pay that as soon as you can (as long as you keep them informed and can clear it by the end of March you should be okay with this).

I know this letter from corwall sounds scary but you cannot pay what you cannot afford. If this is the first letter from them then your first step should be to write to ask them to prove you owe the money - see here - http://forums.moneysavingexpert.com/showpost.html?p=11570893&postcount=2

This will buy you a little time (whilst you sort the ctax) and will ensure that you have proof that they have a right to collect this money. When (if) they send proof you then should send a letter asking for an explanation of the balance, asking for a schedule of interest & charges.

Then once you have all that you can offer token payments until such time as you have work. For someone on benefits that can be as little as £1 per month, it is whatever you can spare. There are templates we can provide you with at that point, and they'll also want to see an income & expenditure statement to show that is all you can afford. You could pay more than £1 per month but £10 a week is excessive given your circumstances.

Good luck

sarah_b_2

hi tixy,
thank you for your response. council tax has been a big priority. i missed a direct debit last year and straight away they sent me a summons! as soon as i rung them and apologised, they accepted me paying a extra £20 a month and to cancel the fee of the summons. it will be paid up in march
it says at the bottom of the letter that i can request this but it will cost £10 which is a lot of money for me. the £10 a week is the absolute max i can pay. i was willing to cut my food budget more, but if i can make token payments that will be great! thank you very much,
sarah.

Welshdebtor

Wooo £10 a week is way too high for someone such as you. As Tixy says £1 a month is enough, be aware they may not be happy. But stick to your guns. Again like Tixy says (god she knows alot lol) there are templates of the letters to send offering token payments etc.